Buying Property in Italy: Prima Casa vs Seconda Casa Taxes

Note: This content is specific to the Italian tax system.

In Italy, the tax system strongly favors residents buying their main home. If you are buying a holiday home ("Seconda Casa"), the costs are significantly higher.

Registration Tax (Imposta di Registro)

This is the main tax when buying from a private seller.

• Prima Casa (Main Residence): You pay 2% of the cadastral value.
• Seconda Casa (Holiday/Investment): You pay 9% of the cadastral value.

Example: For a property with a cadastral value of €100,000:

• Resident pays: €2,000.
• Non-resident pays: €9,000.

Requirements for "Prima Casa" Benefits

To get the 2% rate, you must:

1. Residency: Move your official residency (Residenza) to the municipality where the property is located within 18 months of purchase.
2. No Other Homes: Not own another "Prima Casa" in Italy.
3. Not Luxury: The property cannot be classified as luxury (Catastral categories A/1, A/8, A/9).

Annual Tax (IMU)

• Prima Casa: Exempt from IMU (Municipal Tax). You pay €0/year.
• Seconda Casa: You must pay IMU every year. The rate varies by town but is typically around 1% of the cadastral value annually.

Conclusion

Before buying in Italy, decide if you are willing to become a tax resident. The 7% difference in upfront taxes plus the annual IMU savings can amount to tens of thousands of euros over a decade.

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